The Hindu Business Line : SAIL Q2 net down 26 pc at Rs 1,127 cr

STEEL Authority of India Ltd (SAIL) has announced a 25.53 per cent dip in net profit at Rs 1,127 crore during the second quarter of the current fiscal, as against a net of Rs 1,513 crore during the corresponding period last fiscal.

The steel major's total income went up 5.11 per cent at Rs 7,156.27 crore (Rs 6,808.26 crore). During the first six months of the current fiscal, the net profit fell to Rs 2,250.60 crore from Rs 2,264 crore during the corresponding period last fiscal.

"Our net profit of Rs 1,127 crore in second quarter is lower by Rs 386 crore over the corresponding period last year mainly because of higher tax provision," the SAIL Chairman, Mr V.S. Jain, told newspersons after announcing the results here.

He said that during the previous year, in view of brought forward losses, unabsorbed depreciation and other relief available under the Income Tax Act, the company did not have taxable income and only minimum tax on book profits was provided.

Mr Jain also said the steel prices would remain stable in the rest of the current fiscal and the company would liquidate its inventory pile up within a month. "I think the prices have more or less stabilised though a fluctuation of $20-30 cannot be ruled out," he said. Asked whether a higher interest rate could affect steel consumption, he said the economy remained buoyant and massive investment in infrastructure, housing and other activities would continue to be strong.

"So, a marginal rise in interest rate would hardly affect the need for steel," Mr Jain added.

In order to avoid distress sale due to fall in steel prices, SAIL had stockpiled inventory but this would now be liquidated in a month, he added.

Mr Jain said: "SAIL is now providing regular tax liability. There was higher tax provision of Rs 270 crore during Q2. Our net profit after tax amounted to Rs 2,251 crore during the first half of the fiscal against Rs 2,625 crore recorded during the corresponding period last year." SAIL's debt equity ratio has improved to 0.42:1 against 0.58:1 at the beginning of the financial year.

Overall debt has further come down by Rs 565 crore in the first half of the fiscal 2005-06 and the company continued continues to be virtual debt-free considering the deposits in hand, he added.

He said production of saleable steel increased by 11 per cent during April-September 2005 while average capacity utilisation of plants was about 105 per cent during the same period.

Production through the energy efficient continuous cast route went up by four per cent during the first six months.

While recording highest ever production of saleable steel, SAIL reduced its manpower by over 2,000 with an improvement of six per cent in the labour productivity during the year, he said.

Following impending merger of IISCO, the capacity of SAIL will expand to 22.5 million tonnes of hot metal production by 2011-12. In pursuit of its Corporate Plan-2012, SAIL already has initiated capital schemes worth over Rs 3,500 crore which are at various stages of implementation.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page